Familiarization Training
NJ TAX-AIDE
2015 – 2016
SOMERSET COUNTY
1
Purpose of this Training
 Understand policy & procedures of AARP Tax-
Aide Program
 Understand what is expected of volunteers
 Understand typical tax documents
 Understand how to access & use TaxWise
software (TW)
 Understand how to prepare a simple tax return
using TW
2
AARP Foundation Tax-Aide
 Charitable, non-profit program administered
by AARP Foundation
 Free, nationwide confidential service
 Help low- to mid-income taxpayers with
special attention to age 60+
 Answer tax questions & prepare returns
 Funded 1/3 AARP Foundation, 2/3 IRS Tax
Counseling for the Elderly (TCE)
3
Mission of AARP Foundation
Tax-Aide
 To provide high-quality, free income tax
assistance & tax form preparation to the
greatest number of low- & moderate-income
taxpayers which will produce the most
beneficial result for the taxpayers we serve
No income or age limits
 Only limits are on complexity of return

4
National, Volunteer-Run Program
TY 2014 National Statistics
 Tax-Aide started in 1968 and is now the
largest nationwide, volunteer-run free
tax service
 Taxpayers served: 2.6 million
 Federal Tax Returns prepared: 1.65 M
 Volunteers: 36,000
5
Somerset County Tax-Aide Program
In Somerset County:
 For 2014 tax season, we completed 2,034
returns at 6 sites

Montgomery, Manville, Raritan, Franklin,
Bridgewater, Green Brook
 100% e-filed on the computer
 Approximately 60 volunteers
6
AARP Tax-Aide Counselors
 Are trained
 Become certified
 Are assigned to a site
 Provide free tax counseling
 Report their service
 Promote the program
7
AARP Foundation
Tax-Aide Counselors Are Trained
 In Federal & NJ tax law
 In computer tax preparation software
(TaxWise Online)

Use personal or loaner computers
 In administrative requirements
 In use of appropriate reference materials
 Publications, forms, schedules provided
8
Training Publications & Tools
 Process-Based Training (Pub 4491) &
Workbook (Pub 4491-W)
 IRS Test Booklet (Pub 6744)
 Learning Slide Decks
 NTTC Workbook
 Link and Learn
9
Preparer Publications & Tools
 Volunteer Resource Guide (Pub 4012)
 TaxPrep4Free.org Website
 Laminated Flowcharts
 Interview & Intake Sheets (Form 13614-C)
 Your Federal Income Tax (Pub 17)
 IRS 1040 Instruction Book
 NJ 1040 Instruction Book & GITs
 NJ Special Handling Document
 AARP Scope Document & NJ Can/Cannot Do list
10
Important Reference Websites
 http://taxprep4free.org
Training resources
 Preparer page
 Proficiency problems
 http://www.njtaxaide.org/tavolunteers/somerset
 Somerset County website
 http://www.AARP.org/tavolunteers/
 Volunteer portal includes news, cybertax
notifications, links for administration for AARP TaxAide volunteers

11
Confidentiality, Privacy & Security
 Keep taxpayer info strictly confidential
 Do not retain taxpayer documents
 Do not leave computer unattended if it has
taxpayer data
 All sites use TaxWise Online where data is
stored on secure servers
12
Insurance Coverage & Liability
 Travel accident insurance coverage if on
Tax-Aide business
 Insurance is supplemental to Medicare or
its equivalent & covers medical expenses
&/or death only. Does not cover personal
property such as cars, computers, etc.
 Notify district coordinator ASAP
 By congressional law, counselors are not
liable if they follow the rules
13
Types Of Returns You
Can/Can’t Prepare
 Prepare only those returns for which you have been
trained & certified
 Refer taxpayer to experienced counselor if tax
subject is in Training Module “Topics for
Experienced Counselors “ or if you are not
comfortable with a particular tax situation
 Refer taxpayer to paid tax preparer if anything on
return is Out Of Scope

AARP Scope document & NJ Can/Cannot Do list
 Do not prepare a tax return when you suspect
information is untruthful
14
Counselor Certification
Requirements
 Pass IRS tests with grade of 80%+ (Volunteer
Standards of Conduct & Advanced level tests)

Open book test
 Demonstrate proficiency in preparing tax
returns


Complete assigned problems (using 2014 tax law &
software)
Complete assigned problem(s) focusing on 2015
changes (using 2015 software)
 Sign Volunteer Standards of Conduct
15
Getting Started
Overall Process & The Interview
IRS Form 13614-C Intake/Interview Sheet
16
Overall Process (may differ by site)
 Client calls Tax Appointment phone line requesting tax
help
 Client is assigned to site coordinator/volunteer via email
 Tax volunteer calls client to set up appointment &
reviews Initial Phone Sheet info with client
 Client arrives at tax site & completes Intake/Interview
Sheet

AARP policy mandates use of IRS Intake/Interview Sheet for
every client
 Tax return prepared, quality reviewed, printed for
taxpayer records, & e-filed
17
Interviewing –
The Key To A Good Return
 Focus on interviewing to be sure you gather all
appropriate data to prepare accurate return


Use information from Interview/Intake Sheet as starting
point, but continue to probe for all relevant details
Also review prior year return and ask about items that
have changed
 Entering tax documents into TaxWise software is
not sufficient to ensure accurate return
 Use Volunteer Reference Guide (Pub 4012) decision
trees and flow charts to ensure you are asking all
the necessary questions to determine the full
taxpayer situation
18
Effective Interviewing
 Speak clearly, simply, and loud enough
 Build rapport
 Have patience
 Reassure the taxpayer (“I understand”)
 Ask effective questions (e.g. - probing and
open-ended)
 Allow the taxpayer time to respond
 Involve the taxpayer in the process
19
Verification of Taxpayer Identity
 Identity theft is a major IRS problem – verify
every taxpayer’s identity
 Ask every taxpayer & spouse for photo ID
 Check accuracy of Social Security #s for
taxpayer, spouse & every dependent

Social Security card is preferred verification method
If not available, can use SSA benefit statement or SSA
letter that shows both SS # and name

Inaccurate SS #s can cause return rejects & delays

 If taxpayer is not eligible for a SS #, can use Individual
Taxpayer ID # (ITIN)

Verify original copy of ITIN card or letter
20
Federal-1040 Overview
IRS Form 1040
21
IRS Form 1040
 We file Federal 1040 forms, not 1040A,
1040EZ, etc.
 1040 is split up into 4 general areas
Taxpayer information
 Income
 Taxes & Credits
 Payments/Refunds Due and Signature

22
Taxpayer Information
 Includes:
 Personal information for taxpayer & spouse
 Presidential election campaign question
 Filing status (lines 1– 5)
 Exemptions - including Taxpayer, Spouse &
Dependents (lines 6a-d)
 Input into TaxWise on the Main Information
Screen
23
Form 1040 Page 1 Taxpayer Info
Personal Information
24
Form 1040 Page 1 Taxpayer Info
Presidential Election Campaign
25
Form 1040 Page 1 Taxpayer Info
Filing Status
26
Form 1040 Page 1 Taxpayer Info
Exemptions (including Taxpayer, Spouse
& Dependents)
27
Income
 All sources of income included in this section (lines 7




22)
Income derived from various tax forms usually issued
by employer, financial institution, government agency,
etc.
Information from tax forms and client interview
entered into the respective form or worksheet in
TaxWise
TaxWise puts the appropriate values into the 1040
Adjustments to income included in this section (lines
23-36)
Final line on page 1 is “Adjusted Gross Income” (line 37)
28
1040 Page 1 Income
Income
29
1040 Page 1 Adjustments to
Income
Adjustments
30
1040 Page 1 Bottom Line
Adjusted Gross Income (AGI)
31
Taxes & Credits Page 2
 Taxable Income
 Start with “Adjusted Gross Income” (line 38)
 Deduct Itemized or Standard Deductions (lines 39-41)
 Deduct Personal Exemptions (line 42)
 Arrive at “Taxable Income” (line 43)
 Calculate Tax on “Taxable income” (line 44)
 Total Tax
 Start with Calculated Tax on Taxable Income (line 44)
 Add any excess medical insurance premium aid received through the
Affordable Care Act that has to be repaid (advance premium tax
credits) (line 46)
 Deduct non-refundable tax credits (Credits that reduce tax down to
zero dollars) (lines 48-55)
 Add other taxes due (lines 57-62)
 Bottom line is “Total Tax” (line 63)
32
1040 Page 2 Taxes & Credits
Adjusted Gross Income (AGI)
33
1040 Page 2 Taxes & Credits
- Deduct Itemized or Standard Deductions
34
1040 Page 2 Taxes & Credits
- Deduct Exemptions
35
1040 Page 2 Taxes & Credits
= Taxable Income
36
1040 Page 2 Taxes & Credits
Calculated Tax
37
1040 Page 2 Taxes & Credits
+ Add Excess Advance Premium Tax
Credit Repayment
38
1040 Page 2 Taxes & Credits
- Deduct Nonrefundable Credits
39
1040 Page 2 Taxes & Credits
+ Add Other Taxes
40
1040 Page 2 Taxes & Credits
= Total Tax
41
Payments/Refund/Owe
 Payments
 Apply tax withheld and estimated payments
 Add refundable credits (these credits can exceed
the amount of the tax you owe and increase
your refund)
 Total is your total payments
 Subtract total payments from total tax
 If payments are greater than total tax, you are
entitled to a refund
 If payments are less than total tax, you owe taxes
42
Payments/Refund/Owe
Apply tax withheld & estimated payments
43
Payments/Refund/Owe
Apply refundable credits
44
Payments/Refund/Owe
= Total of all payments
45
Payments/Refund/Owe
= Bottom Line (A refund / You owe)
46
Direct Deposit/ Sign
 In the box below the refund is a spot for
direct deposit information
 Bottom of the form is the signature box
47
Direct Deposit/Sign
Direct Deposit information
48
Payments/Refund/Owe/Sign
Signature Line
49
NJ-1040 Overview
NJ 1040
50
NJ 1040 Paper Page 1
 Page I of the Paper NJ 1040 Tax Form
includes
Taxpayer personal information
 County/Municipality Code
 NJ Filing Status
 Exemptions
 Dependent information
 Gubernatorial Election Fund Check Boxes
 Signature Box

51
NJ 1040 Paper Page 1
Personal Information, Municipality Code, Filing Status, Exemptions
52
NJ 1040 Paper Page 1
Dependents, Gubernatorial Election Question, Signature Line
53
NJ 1040 Paper Page 2
 Page 2 of the Paper NJ 1040 Tax Form
includes
Income
 Exclusions
 Exemptions
 Deductions
 NJ Taxable income
 NJ Tax

54
NJ 1040 Paper Page 2
Income
55
NJ 1040 Paper Page 2
Exclusions, Exemptions, Deductions, Taxable Income
56
NJ 1040 Paper Page 3
 Page 3 of the Paper NJ 1040 Tax Form includes
Tax
 Credits
 Use tax on out-of-state purchases
 Payments
 Penalties
 Amount owed
 Contributions
 Amount to be refunded

57
NJ 1040 Paper Page 3
Tax, Credits, Use Tax & Penalties
58
NJ 1040 Page 3
More Credits, Payments, Contributions, Refund/Owed
59
NJ1040 Paper Page 4
 NJ Paper Page 4 is the NJ 1040H – Property
Tax Credit Application
Not in TaxWise – Paper file only
 Used for certain taxpayers that do not file a NJ
return but are entitled to a property tax credit
 Details to follow in Tax Law training modules

60
NJ 1040H
61
TaxWise NJ 1040
 Page numbers in TaxWise do not match page
numbers of the paper return, but all
information is the same
 Most of the information is carried forward
from the TaxWise Federal 1040 to the
TaxWise NJ 1040
 NJ 1040 entries can be tricky
62
TaxWise NJ 1040 Entries
 The following items are the minimum required
manually input entries (do not come from Federal):






County/Municipality Code must be entered on page 1 of
TaxWise NJ 1040
Gubernatorial Election Fund Question must be answered
on page 2 of TaxWise NJ 1040
Property tax info for block/lot & municipality code must
be entered on page 3 of TaxWise NJ 1040
Use tax due on out-of-state purchases must be entered
on page 3 of TaxWise NJ 1040
Worksheet F Property Tax Deduction/Credit info must be
entered on page 3 of the TaxWise NJ 1040
NJ DD Worksheet must be completed
63
NJ 1040 for Familiarization
 For Familiarization we are entering just
basic NJ items
 Resource for NJ 1040 is “New Jersey Special
Handling” document found on the
TaxPrep4Free.org web site
 More detail on NJ coming later
64
Intake/Interview & Quality
Review Sheet
Form 13614-C Intake/Interview & Quality
Review Sheet
65
IRS Intake/Interview Sheet –
Form 13614-C
 Must be completed for every tax return
 Required starting point for taxpayer(s) is to
complete Intake/Interview Sheet
 Contains basic information needed for tax
return
 Taxpayer fills out most, but volunteers may
assist
 Counselor’s starting point with taxpayer(s)
66
Intake/Interview & Quality Review
Sheet (13614-C) - Page 1
 General information about taxpayer, spouse
and dependents.
Completed by taxpayer except for Part II shaded
area
 Information on this page entered on “Main
Information Sheet” in TaxWise by preparer
 Part I - Taxpayer personal information
 Part II - Marital Status & Household information
 Part II shaded area – to be completed by
preparer

67
Intake Sheet Page 1
Personal Information Part I
68
Intake Sheet Page 1
Marital & Household Information – Part II
69
Intake/Interview & Quality Review
Sheet (13614-C) - Page 2
 Part III – Income questions
 Part IV – Expense questions
 Part V – Life events questions
 Answers to all the questions must agree
with documents presented by taxpayer
 Preparer to make corrections and initial
where changes are made
70
Intake Sheet Page 2
Income – Part III
71
Intake Sheet Page 2
Expenses – Part IV
72
Intake Sheet Page 2
Life Events – Part V
73
Intake/Interview & Quality Review
Sheet (13614-C) Page 3
 Part VI – Health Care Coverage
 Questions 1 & 2 – Completed by Taxpayer
 Shaded Area – Completed by preparer by
interviewing taxpayer
 Part VII Additional Information & Questions
 1. Presidential Election Campaign Fund question
 2. Tax refund questions
 3. Tax payment question
 4. & 5. Grant money questions
 Additional Comments
74
Intake Sheet Page 3 – Health Care
Coverage - Part VI
75
Intake Sheet Page 3 – Additional
Information & Questions – Part VII
76
Intake/Interview & Quality Review
Sheet (13614-C) Page 4
 Part VIII
 Information for the preparer & quality
reviewer
 Initials of Preparer & Quality Reviewer (Leave
Blank)
 Additional Tax Preparer Notes
 Privacy Act and Paperwork Reduction Act
Notice
77
Intake Sheet Page 4
78
Introduction To TaxWise
Pub 4012, Section N
79
TaxWise Online (TWO)
 Forms-based software used for tax return
preparation (not interview style)
Only software approved by IRS for free tax
preparation sites
 Developed & maintained by Commerce Clearing
House (CCH)
 Calculations done & returns stored on TWO server



Can work on same return from multiple computers
(but not simultaneously)
No taxpayer data stored on individual computers
80
TaxWise Online (TWO)
cont’d
 Training TWO Software:
 Most of our training will use 2014 TWO training
https://twonline.taxwise.com/training14
 2015 training environment is also available, but
will not include NJ software until late January
(https://twonline.taxwise.com/training)
 Production 2015 TWO Software:
 Access to be provided after counselor is certified
 Prior years TWO software is available for prior
year returns/amendments
81
TaxWise Online (TWO)
cont’d
 Returns are kept in separate environments by
training vs. production and by tax year

Always make sure you are in proper environment
before you start a return


Opening screen – look for 2014 vs. 2015 User Guide
Can differentiate production vs. training
environments by background color once you are
logged in



Login screens are exactly the same for all environments
Training environments - background is green
Production environments - background is blue
82
Logging in to TaxWise Online (TWO)
Training
 Use this URL to access 2014 TWO training
website for familiarization training:
https://twonline.taxwise.com/training14
 Use client ID 2276756
 First time logging in, use your assigned ID as
both User ID and Password


All IDs start with SOMERSET
Last 2 digits are your student #
83
TWO Initial Sign-In
User Name set up by
administrator
Initially password is same
as User Name
84
TWO Password Change Request
85
TWO Password Change
86
TWO Main Screen & Starting a New
Return
Start a new return
87
TWO Start New Return
SS # entered twice
SS # in XXX-YY-ZZZZ format
XXX=First 3 #s from problem
YY=Student ID
ZZZZ=4139 (EFIN)
88
TWO First Method of Opening
Existing Return (Select SS #)
Can sort return listing order by
clicking on heading of column
Open an existing return by
clicking on SS #
89
TWO Second Method of Opening
Existing Return (Enter SS #)
Open existing return by:
• Click on Open return icon
• Enter SS #
Always click on Go to Tax Forms; never use Go to Interview
90
TWO Third Method of Opening Existing
Return (Use Search Returns Box)
Can enter full or partial name, full or
partial SS #, student ID (e.g. “-06-” to see
just a particular student’s returns),
username, etc.
91
TaxWise Refund Monitor & Navigation
Tree
Refund Monitor :
Adjusted Gross Income (AGI) amount &
Refund Amount provide running totals
Green & Check Mark: No
obvious fields missing & can be
e-filed
Gray: Form will not be e-filed
Red & Exclamation Point:
Incomplete or Incorrect Form
State forms loaded when State is
selected; no NJ Refund Monitor –
check NJ 1040 Pg 3
92
TaxWise Forms Menu
Forms Menu:
List of all
Forms &
Worksheets
in TaxWise
Includes
State Forms
Can search by entering
name or partial name of
form or topic
93
TWO Field Color Coding
Underline Color in TWO
Calculated entry
Green
Non-Calculated or
Direct Entry
Black
Required entry
Red
Overridden field
Blue
94